Posted by David Alexander on March 23, 2005 at 09:12:13:
$50 dollars a month cashflow on a rental ain’t enough… That ain’t cashflow…
Waiting for and betting for appreciation is dumb… properties don’t always go up…
David Alexander
Interest only - Posted by larry
Posted by larry on March 22, 2005 at 20:07:07:
If a rental property will only cash flow using an interest only loan is it still a good idea. A little afraid of when the 5 or 7 years are up, it still won’t cash flow .
Try this - Posted by clint
Posted by clint on March 23, 2005 at 06:08:27:
Rent to Own: $X,000 Down, pmts only X per month. NO BANK is Needed.
Then do a rent to own/leas option/contract for deed, or whatever, with a 5 year balloon.
Cash out.
Do it again.
Re: Interest only - Posted by GL(ON)
Posted by GL(ON) on March 22, 2005 at 22:30:17:
Depends. Is that the best you can do? Is it a good property in a good neighborhood? Are you happy with the deal, and can you afford to carry a slight negative cash flow if necessary? Then buy it, you wont be sorry.
I cant guarantee anything but with normal rent increases and normal inflation it would be extremely unusual not to have pos cash flow in 1 or 2 years, and the property should double in value in 5 to 7 years.
I think… - Posted by David Alexander
Posted by David Alexander on March 22, 2005 at 22:02:28:
you’ve answered your own question…
If it don’t feel right… (don’t cashflow up front) well… it probably…
Ain’t…
David Alexander
Balloons… - Posted by David Alexander
Posted by David Alexander on March 23, 2005 at 10:25:56:
are defaults waiting to happen…
Been there done that… you can’t make chicken soup… outta chicken… &*%# !
Or as John Behle says… balloons are for clowns…
I think he calls them “defualts in embryo”
David Alexander
Re: I think… - Posted by larry
Posted by larry on March 22, 2005 at 23:37:49:
It will cash flow using int only (approx $50). My concern is that when the 5 or 7 yr arm is up, it won’t cash flow if I refi to a more conventional loan. Rents are stagnating in my area, while int rates are climbing.
Re: I think… - Posted by Natalie-VA
Posted by Natalie-VA on March 23, 2005 at 08:56:56:
Are you saying that it will cash flow $50 after taking maintenance/repairs and vacancies into account? Take your rent and multiply by 75% and compare that number to your PITI.
The reason I bring this up is because sometimes people don’t understand what cash flow is. I have 2 rental properties on one loan. Incoming rent is $2000 and my PITI and condo dues are $1500. Sounds like I have $500 cash flow, but I really don’t.
$2000 x .75 = $1500 — I am really just breaking even.
Just some more food for thought.